Norilsk Nickel Shareholders Vote to Retain Board

MOSCOW, Oct. 22 -- Shareholders in Russian mining group Norilsk Nickel (GMKN.MM) voted on Thursday to retain its current board of directors, the company said.

It said shareholders representing 46.9 percent of the company's shares voted at an extraordinary meeting (EGM) to retain the current board, while 37.9 percent voted to dismiss, falling well short of the majority required.

"The legal situation is proper," Norilsk Nickel Chairman Vasily Titov said, adding that a representative of Russia's financial market watchdog had observed the voting.

The shareholder vote is a victory for tycoon Vladimir Potanin in a battle for the company with fellow billionaire Oleg Deripaska.

Deripaska's aluminum group RUSAL (0486.HK), which holds about 25 percent of the miner, called for the EGM after losing influence on the company's board at the June AGM. [ID:nN28272122]

It asked shareholders to vote against the current board, which it argues is unfairly balanced in favour of Potanin's Interros investment group, in order to bring in new executives and spearhead a strategic shift.

Interros and management have seven seats on the board, while RUSAL has three. Potanin's Interros also holds 25 percent of Norilsk Nickel shares.

RUSAL issued a statement after the vote arguing Interros influenced Norilsk Nickel's management -- which holds 8.5 percent of the company -- to vote with Potanin.

RUSAL said it will continue to pressure the company to change its strategy.

"We remain convinced that the company's market capitalization could be doubled if the management were to pursue the highest standards in effective pricing, efficient cost management, strategic disposals, environmental standards and corporate governance," RUSAL said.

But Interros welcomed the shareholders' decision.

"It's a very important moment," a spokeswoman said. "The result gives us the opportunity to grow the company in the right direction."

The conflict between the two tycoons is far from over, as RUSAL in August filed an arbitration request in London court in relation to an earlier cooperation agreement for the election of directors to Norilsk's board. [ID:nLDE67A0FD]

The world's largest aluminium company said it would continue to work with minority shareholders to elect a new board.